IQ Option is a unique broker with a digital options trading platform. We are dedicated to providing our South African traders with top-notch security measures, state-of-the-art technological innovations and distinctive features so as to provide a trustworthy platform to enable effortless trading in South Africa.
A digital option is an simple form for trading where the trader speculates whether the price of an asset will rise or fall at the expiry time. The expiry time is an indication of when the transaction will close. A strike price refers to the price at which an asset may be purchased at a given time. In-the-money means you may profit from the transaction and that it is worth exercising, while out-of-the-money means you may be very close to losing your investment. digital options trading has become more popular in South Africa due to ease of accessibility and the innovative features it has displayed over time.
Below are the Top Five digital Options Beginner’s Tips to enable you to become a successful trader in South Africa:
1. Requirements for participating in digital options trading
- As a South African trader, you should be over 18 years of age. Hence, a proof of identity is required.
- A trader must be aware that trading in digital options may result in a loss. You are, therefore, advised not to invest your expenditure money i.e. money kept aside for your food, health and/or rent bills.
- Traders should invest in legal tenders from their own online wallets to fund their accounts.
2. Trading procedure
In digital options, traders in South Africa can participate in two ways:
- Call option: Call option allows the investor to gain money when the investor predicts that the price of the asset at hand will increase in value over a given trading period.
- Put option: Input option, the investor profits if he predicts that the price of a given asset will drop over a given period.
3. Assets involved in digital options
To better trade with digital options, you need to understand the assets involved. They include:
- Currency pairs which are available in over 25 currency pairs. They include EUR/USD/SA RAND and many others.
- Indices which are securities that represent a market whereby each index has its own calculated market value.
- Commodities which are inclusive of items such as gold, silver, sugar among others.
- Stocks which basically share that companies own and traders buy.
4. Advantages of digital option
digital options trading in South Africa does not require much experience since it’s not as complex as forex exchange. Also, it
offers high returns on your investment. It is simple as there is no requirement of downloads nor any third party involvement and it enables traders to trade in a wide variety of assets. For instance, traders can choose from currencies, commodities, stocks and indices – all in one place – on the IQ Option platform.
5. Market analysis procedure
For South African traders to get a return on their investment, they must examine the market through detailed analysis of the products they are investing in. This may be done in the following two methods:
When a trader goes through past chart movements of an asset so as to predict the likely movement of the commodity across the charts.
Involves studying information on the economics affecting the commodity in question that may, in turn, affect the commodity’s behaviour across the charts.
Being alert on trends affecting your commodity will help you keep track of your preferred stock. It involves charts and graphs.
Traders can determine the volatility of their assets by looking at movements on the charts. An asset whose chart movement is smooth is less volatile than that whose charts exhibit jagged up-and-down movements.
The charts may be line charts that connect data points on past prices together with a line, or candlestick charts which contain market open, high, low and close of a specific day.
At IQ Option, we advise our South African traders, to begin with, the 5/15 rule which represents the percentage of a single investment in relation to the entire capital invested and then rise to the 10/30 rule as you become more aggressive.
If you are consecutively unsuccessful in your investments, you should consider exiting the market and analysing it further so as to prevent further losses.
We hope that these Top 5 digital Options Beginner’s Tips will help you become the successful trader you are hoping to be. Even though your experience may be limited, we, at IQ Option, are confident that once you are equipped with the digital options beginner’s tips, we would have provided a platform for you to reach your dream heights.